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30 The Becker Company is interested in buying a piece of equipment that it needs. The following data have been assembled concerning this equipment: Cost
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The Becker Company is interested in buying a piece of equipment that it needs. The following data have been assembled concerning this equipment: Cost of required equipment $250,000 Annual operating cash inflows $80,000 Working capital required $100,000 Salvage value at end of 6 years $90,000 Cash repair at end of 4 years $40,000 This equipment is expected to have a useful life of 6 years, At the end of the sixth year the working capital would be released for use elsewhere. The company?s discount rate is 10%. The present value of the net cash flows (all cash inflows less all cash outflows) occurring during year 6 is closest to: $270,000 $195,900 $107,200 $152,300Step by Step Solution
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